Spy vs. Spy: Espionage and the U.S.-Israel Rift

If more evidence was needed to show that the relationship between Benjamin Netanyahu and Barack Obama has morphed from tragedy to farce, it came late Monday with the revelation that Israel had spied on the nuclear talks between the United States and Iran.

“The White House discovered the operation,” according to the blockbuster account by Adam Entous in The Wall Street Journal, “when U.S. intelligence agencies spying on Israel intercepted communications among Israeli officials that carried details the U.S. believed could have come only from access to the confidential talks, officials briefed on the matter said.”

Talk about spy vs. spy, the old Mad magazine trope featuring two pointy-nosed, masked cartoon creatures. The National Security Agency, eavesdropping on Israeli officials (as usual, according to the revelations of Edward Snowden), overheard them discussing intelligence their own spies had gathered by spying on U.S. officials talking about the Iran negotiations.

This was a whole new level of gamesmanship between the two bickering allies.

“It’s one thing for the U.S. and Israel to spy on each other. It is another thing for Israel to steal secrets and play them back to U.S. legislators to undermine U.S. diplomacy,” an unnamed “senior U.S. official” told the Journal.

Officials in Jerusalem issued emphatic denials, as they did last year when Newsweek reported on Israeli espionage against the U.S., saying that “Israel does not spy on the United States, period, exclamation mark,’’ as Yuval Steinitz, minister for intelligence and strategic affairs, told Israel Radio on Tuesday.

Of course, Israel does spy on the U.S., and vice versa. In the age of cyberwar, electronic spying runs on autopilot, with state-of-the-art Pac-Mans zooming around the Internet gobbling up anything with the right keyword. Anybody with an antenna (or a keyboard) spies on whoever is seen as the remotest threat, including friends. Or as the Journal put it, “While U.S. officials may not be direct targets...Israeli intelligence agencies sweep up communications between U.S. officials and parties targeted by the Israelis, including Iran.”

And how did the Israelis intercept conversations between officials in Tehran and Washington? In another comedic dimension to this latest spy flap, it turns out that “U.S. intelligence agencies helped the Israelis build a system to listen in on high-level Iranian communications,” the Journal reported.

In part, it’s an old story. Israel’s clandestine operations to steal U.S. scientific, technical, industrial and financial secrets are so commonplace here that officials in the Pentagon and FBI periodically verge into open revolt.

Last year, U.S. intelligence officials trooped up to Capitol Hill to tell U.S. lawmakers considering visa waivers for Israelis that Jerusalem’s spying here had “crossed red lines.” One congressional staffer who attended the behind-closed-doors briefings called the information “very sobering…alarming…even terrifying.” Another staffer called it “damaging.”

“We used to call the Israelis on the carpet once a year to tell them to cut it out, when a particular stunt was just too outrageous ” says a former top FBI counterintelligence official. “They’d make all the right noises and then go right back at it through another door.” But since Israel is such an important strategic ally of the U.S., it was a sin that could not be named. The standing order has always been to just suck it up.

Until this week. The accusations by the unnamed Obama administration officials marked a new frontier in calling out the Israelis—or at least Netanyahu’s right-wing administration.

Netanyahu had crossed some sort of red line again when, according to the Journal, his man in Washington began quietly sharing Israeli intelligence about the U.S. negotiating position with members of Congress, hoping to shore up support for its rejection of any deal with the Iranians short of a total nuclear capitulation on their part. But what seems to have pushed Obama officials over the edge was that Ambassador Ron Dermer, a former Republican operative who holds dual U.S.-Israeli citizenship, was wildly exaggerating what the U.S. position was, according to the Journal, making it sound like the White House had given away the store to the Iranians in a desperate effort to ink a deal.

Republican Representative Devin Nunes of California, chairman of the House Intelligence Committee, indicated he had indeed gotten a different view on Iran from sources outside the administration.

“As good as our intelligence community is, a lot of times we don’t even know what the Iranians are up to,” he told CNN. “So we were shocked at the disclosures that have come forward of the size and scope of the Iranian program even in the most recent years.”

One former U.S. intelligence operative with long, firsthand familiarity with Israeli operations called the revelation “appalling but not surprising,” especially under Netanyahu, whose governing coalition depends on the support of far-right Orthodox and ultra-Orthodox parties with a stake in the West Bank settlements.

“The fact that there is such manipulation of our institutions by a so-called ally must be exposed, and the ‘useful idiots’ in [the U.S.] government who toe the Likud line will someday be looked back upon as men and women who sacrificed the U.S. national interest for a foreign ideology—Likud right-wing Zionism,” the operative said, on condition of anonymity due to the sensitivity of the matter.

“We know publicly that the administration is seething,” he added, “but I can assure you that behind closed doors the gloves are coming off. Bibi is in the administration’s crosshairs. If this is what is being allowed to leak publicly, you can bet that, behind the scenes, folks both in the White House and the foreign policy-intel community [are prepared to] act on that anger.”

This is not the end of it, he predicted. The American Israel Public Affairs Committee (AIPAC), which critics say has morphed from a powerful “pro-Israel” lobby to a powerful pro-Likud lobby over the years, will be Obama officials’ next target.

“I’m betting there are going to be some willing leakers now about stories such as AIPAC’s operations against Congress,” the former operative said.

Bob Corker of Tennessee, the Republican chairman of the Senate Foreign Relations Committee, has no doubt that Obama administration officials made a calculated decision to call out Netanyahu, who has long been at odds with the White House on the Middle East peace process, Israeli settlements in the occupied West Bank and the Iranian nuclear talks.

But if Senator Tim Kaine, a Virginia Democrat, is any barometer, the Israelis have little to worry about.

“I just don’t look at that as spying,” Kaine said of the Journal’s allegations. “Their deep existential interest in such a deal, that they would try to figure out anything that they could, that they would have an opinion on it…I don’t find any of that that controversial.”

Jeff Stein writes SpyTalk from Washington, D.C. He can be reached more or less confidentially via spytalker@hushmail.com.

"The ice doesn’t care what this administration thinks. It’s just going to keep melting," David Titley, the director of the Center for Solutions to Weather and Climate Risk at Penn State, told Newsweek.